ORGANISATION DESIGN and DEVELOPMENT

COMMENT

The CIPD defines OD as ‘planned and systematic approach to enabling sustained organisation performance through the involvement of its people’. Behind this definition lies a depth of research and practice, but also confusion.

Others have described OD in the following ways1:

* A planned process of change in an organisation’s culture through the utilisation of behavioural science technology, research and theory. (Warner Burke)

* A long-range effort to improve an organisation’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioural-scientist consultants, or change agents as they are sometimes called. (Wendell French)

* An effort (1) planned, (2) organisation-wide, and (3) managed from the top, to (4) increase organisation effectiveness and health through (5) planned interventions in the organisation’s ‘processes’, using behavioural science knowledge. (Richard Beckhard)

* A system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at (1) enhancing congruence among organisational structure, process, strategy, people and culture; (2) developing new and creative organisational solutions; and (3) developing the organisation’s self-renewing capacity. It occurs through the collaboration of organisational members working with a change agent using behavioural science theory, research and technology. (Michael Beer)

These definitions may vary in emphasis, but there are common features:

1. OD applies to changes in the strategy, structure, and/or processes of an entire system, such as an organisation, a single plant of a multi-plant firm, a department or work group, or individual role or job.
2. OD is based on the application and transfer of behavioural science knowledge and practice (such as leadership, group dynamics and work design), and is distinguished by its ability to transfer such knowledge and skill so that the system is capable of carrying out more planned change in the future.
3. OD is concerned with managing planned change, in a flexible manner that can be revised as new information is gathered.
4. OD involves both the creation and the subsequent reinforcement of change by institutionalising change.
5. OD is orientated to improving organisational effectiveness by:

- helping members of the organisation to gain the skills and knowledge necessary to solve problems by involving them in the change process, and
- by promoting high performance including financial returns, high quality products and services, high productivity, continuous improvement and a high quality of working life.

The challenge with many of the definitions of OD is that they may be technically correct, but do they actually help people to understand and practice in the field of OD? This factsheet explores the history of OD to increase the understanding and looks at the characteristics and examples of OD in practice.
History of OD

OD developed primarily in the USA out of a number of different schools of thought and practice that have included social psychology, systems thinking, and psychotherapy. More recently, this has also included newer developments such as business process re-engineering, story-telling and large group interventions.

This, in part, explains some of the confusions about OD. The term ‘OD’ is sometimes used interchangeably with other disciplines, such as organisational design, learning and development, and organisation effectiveness. As a result of this, two people may share the job title ‘OD consultant’, yet come from very different disciplines and do some very different things in their work.
Academic beginnings


American psychologists and behaviourists working in the late 1940s and 1950s found that the application of participative methods to small groups led to attitude change, higher performance and greater commitment. Abraham Maslow argued for the inherent potential of individuals to pursue ‘self actualisation’, which was more likely to be achieved under conditions of openness and personal recognition. Organisation theorists like Chris Argyris and Rensis Likert advocated organisation-wide participation as a means of motivating individuals and hence achieving greater performance. New theories of leadership and change also developed: for example, Douglas McGregor proposed that different styles of leadership would result in different reactions – more positive under ‘Theory Y’, which was participatory and democratic, and more negative under ‘Theory X’, which was oppressive and authoritarian.

Some of the early founders were heavily involved in the T-group movement, a movement resembling group therapy and focusing on group dynamics (although the ‘T’ was said to stand for ‘training’ rather than ‘therapy’). T-groups operated on the underlying premise that causality for behavioural problems lay in an individual’s perceptions, assumptions and feelings concerning events and people around the individual. The solution could be found by altering these elements with feedback in a sensitivity group led by a nondirective trainer.
OD spreads

In the 1960s, the term ‘organisation development’ came into being as an overarching umbrella to include and embrace all of the previous thinking about the behavioural aspects of people involved in changing and developing organisations’2. OD then spread rapidly within American organisations, which were looking for help in changing the styles of their managers to improve organisational performance. T-group exercises, run by consultants, often on a large scale and designed to move managers towards more open and trusting behaviour, were frequently the vehicle for this. In the UK, group-based methods of learning and change were being used in coalmines with the involvement of the Tavistock Institute.

OD at this stage could be ‘categorised as primarily focusing on individuals and interpersonal relations. [It] was established as a social philosophy that emphasised a long-term orientation, the applied behavioural sciences, external and process-oriented consultation, change managed from the top, a strong emphasis on action research and a focus on creating change in collaboration with managers’3.

However, ‘like the growth of many management techniques, OD gradually took on characteristics of a fad"

 and then began to be criticised for not achieving the desired outcomes. It was seen to be too ‘touchy-feely’, and in particular to put the individual before the organisation and the informal organisation before the formal organisation. Not all consultants practising OD were well trained, and OD’s emphasis on openness and change was seen as threatening by managers. It was questioned whether OD’s emphasis on training programmes was in itself sufficient to produce lasting changes.
Putting OD into practice

One of the challenges in delivering OD work is that it not just what you do, but also the mindset that is brought to bear on the work. So what does this mean in practice? Anything that an OD practitioner does in the organisation can be described as an ‘intervention’. Two examples of OD interventions are:

* The HR team working with the Business Planning team to develop a performance management system that properly aligns individual and organisational goals
* HR Business Partners working with their IT and Finance colleagues to provide a consistent approach to support management teams in delivering strategy.

So what makes these distinctively OD? An HR practitioner may design and implement a new performance management system without it being an OD intervention. What is distinctive is the creating of alignment with the work of other parts of the organisation in a planned way – what can be described as a ‘systemic and systematic mindset’. The idea of OD as a ‘scavenger discipline’ is helpful in understanding that it borrows tools and techniques from a wide range of professions and functions in the organisation. Successful OD practitioners are often very effective at working with colleagues in different departments or organisational disciplines.
Characteristics of OD

It is the underlying characteristics of OD work that help us to see the commonality across the different areas of OD and the link to HR.

* OD work contributes to the sustained health and effectiveness of the organisation
* OD work is based upon robust diagnosis that uses real data from organisational, behavioural and psychological sources
* OD work is planned and systemic in its focus, that is taking account of the whole organisation
* OD practitioners help to create alignment between different activities, projects and initiatives
* OD work involves groups of people in the organisation to maximise engagement, ownership and contribution

CIPD viewpoint

Proponents of OD argue that at OD’s heart is the ability to focus on ‘all levels of the organisation – individual, group, inter-group, total system, and inter-organisational – rather than limiting the practice to one or two levels, as in, say, management and leadership development’4 – in brief, an ability to understand the whole organisation. This is an ambitious claim, and one that may not always be justified. However, given the increasing need for the HR profession to act as a business partner, OD and its methods have a part to play in developing HR’s strategic role and its involvement in organisational change, organisational culture and employee engagement.

In the UK, OD is often positioned within the organisation as part of HR and an increasing number of HR functions have ‘OD specialists’ in their teams. The introduction and growth of ‘business partnering’ over the last 10 years has also highlighted the opportunity for HR professionals to play a key role in the development and delivery of organisational strategy. For more on HR business partnering, see the CIPD factsheet on that topic.

* Go to our factsheet on HR business partnering

Moreover, OD’s focus on people and its traditional humanistic values fit well with another of HR’s roles: that of being the social conscience of the business or value champion. Many of the techniques of OD are being used by HR and training specialists.

The discipline of OD is in something of a crisis in the USA: specialists there are concerned that it may become subsumed within the wider area of HR. In the UK and Europe, with little tradition of OD as a separate academic and corporate discipline, this may be of limited concern. What is important is that the values and techniques of OD have fed into those used by HR professionals; in particular, OD’s emphasis on understanding the whole organisation is valuable for those who seek to develop the HR function’s role as a strategic business partner. The crucial factor for the healthy future of OD, maybe ensuring that practitioners are disciplined in how they describe OD, and importantly, what it contributes to the success of organisations.

SOURCES OF INFORMATION

CIPD

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